This opinion is subject to
further editing.If published, the
official version will appear in the bound volume of the Official
Reports.

A party may file with the
Supreme Court a petition to review an adverse decision by the Court of
Appeals.SeeWis. Stat. § 808.10 and Rule 809.62.

Appeal No.

2012AP775

Cir. Ct. No.2011CV349

STATE OF WISCONSIN

IN COURT OF
APPEALS

DISTRICT II

Agnesian Healthcare, Inc.,

Plaintiff-Respondent,

v.

RTF Manufacturing Company, LLC,

Defendant-Appellant.

APPEAL
from a judgment of the circuit court for Fond du Lac County:richard
j. nuss, Judge.Affirmed and
cause remanded.

Before Brown, C.J., Neubauer, P.J., and Gundrum, J.

¶1PER CURIAM. RTF Manufacturing Company, LLC,
appeals a judgment entered in favor of Agnesian Healthcare, Inc., ordering RTF to
pay Agnesian $28,783.64 in damages and $13,062 in attorney fees for RTF’s
violations of express and implied warranties and Wis. Stat. § 100.18 (2009-10).[1]RTF challenges the sufficiency of the
evidence and the fee award.We affirm
the judgment in its entirety and remand the case to the trial court for an
award of appellate attorney fees pursuant to § 100.18(11)(b)2.

¶2Agnesian was looking for refrigerators and/or freezers for
storing medical products such as medicine and vaccines, for which temperature
control within a narrow range is critical.RTF sells clinical refrigerator/freezers (“units”).Alan Del Ponte, Agnesian’s mechanical,
refrigeration and freezer maintenance person, researched various manufacturers
and units.Del Ponte located RTF’s
website, which stated that RTF’s units were “designed for scientific, clinical
and industrial use,” and equipped to “maintain standard operating temperatures
of +4°C in the Refrigerator section and -20°C in the Freezer section, both with
+/- 1°C differentials” and that its “new balanced refrigeration system …
maintains a temperature under varying load conditions and ambient temperature
changes.” Agnesian purchased four units for $28,783.64. The Warranty Certificate
accompanying the units stated a one-year warranty on parts and labor and
required Agnesian to pay transportation costs to return defective units.

¶3Upon unpacking the units, Del Ponte noted that some of the
walls and panels were bowed and warped.When
he started up two of the units, they exhibited “large temperature swings” and
one would not “pull down” to the range necessary to proper material
storage.Del Ponte promptly called
RTF.

¶4RTF president Tom Finck visited Agnesian to inspect the units.
He told Del Ponte that the room where
Agnesian installed the units was too warm for them to operate properly.Finck also identified a number of other
issues with the units, which Finck suggested were the result of post-delivery damage
or alteration.Finck took notes during
his inspection.RTF did not disclose them
in discovery.

¶5The parties were unable to resolve the problems with the
units to their mutual satisfaction.RTF
refused to give Agnesian a full refund unless Agnesian paid the $2,000 return shipping
charges and $7,000 restocking.Agnesian refused
and filed suit.

¶6The trial court found that the units’ defects occurred in
manufacturing, not in transit or by Agnesian’s mishandling; that the units were
not merchantable or fit for their intended, clinical purpose; that RTF knew
that Agnesian purchased the units for use in the medical industry; that the
statements RTF published on its website claiming that the units would maintain
standard operating temperatures with a +/- 1ºC differential were untrue,
deceptive or misleading; that Agnesian relied on RTF’s website representations
that the units were suitable for laboratory and clinical purposes; and that
Agnesian suffered pecuniary loss as a result.The court also found that RTF’s failure to disclose Finck’s notes or
advise Agnesian of their existence occurred in bad faith.

¶7The trial court therefore concluded that RTF breached its
express one-year warranty and its implied warranties of merchantability and of
fitness for a particular purpose; that any limitations stated in the Warranty
Certificate were unenforceable because they were not communicated beforehand
and were undone by the breach of the express warranties; and that RTF’s website
representations violated Wis. Stat. § 100.18.The court ordered RTF to refund Agnesian’s
$28,783.64, to assume the full costs of retrieval and/or disposal of the units,
and to pay Agnesian’s attorney fees of $13,062 under § 100.18 or Wis. Stat. § 804.12(2) as a
sanction for violating the court’s discovery order, or pursuant to the court’s
inherent authority.RTF appeals.Agnesian seeks a remand to determine
appellate attorney’s fees.

¶8To prevail on its Wis.
Stat. § 100.18 claim, Agnesian had to prove that (1) RTF made a
representation to the public with the intent to induce an obligation, (2) the
representation was untrue, deceptive or misleading, and (3) the representation
caused Agnesian a pecuniary loss.Novell
v. Migliaccio, 2008 WI 44, ¶44, 309 Wis. 2d 132, 749 N.W.2d 544; see alsoWis
JI—Civil 2418.

¶9RTF submits that the trial court rested its finding of a Wis. Stat. § 100.18 violation on
the fact that, until Finck visited Agnesian, RTF did not disclose the
importance of ambient temperature to proper functioning of the units.The trial court found:

Both
during and after the inspection, Tom Finck asserted that the units were not
performing properly because they were operated in a room where the ambient
temperature was too high.At different
times, Tom Finck claimed that the highest ambient temperature in which the
units could be operated was 72ºF, 74ºF, and 75ºF.However, RTF did not note any ambient
temperature restrictions on its website, in the technical manual that
accompanied the units, or in any other manner prior to Tom Finck’s inspection.

¶10RTF correctly contends that nondisclosure does not support a
claim under Wis. Stat. § 100.18.Section 100.18 “prohibits only
affirmative assertions, representations, or statements of fact that are false,
deceptive, or misleading” and that “[a] nondisclosure is not an ‘assertion,
representation or statement of fact’” under the statute. Tietsworth v. Harley-Davidson, Inc.,
2004 WI 32, ¶40, 270 Wis. 2d 146, 677 N.W.2d 233.This finding, Finding 15, does not stand
alone, however.

¶11Finding 16 states:“The
ambient temperature restrictions asserted by Tom Finck are not credible because
they were inconsistent and were not communicated until after Agnesian notified
RTF of the unit’s defects.”The
importance of the nondisclosure, therefore, was two-fold.First, it played a role in Finck’s
credibility.When the trial court is the
trier of fact, we must defer to its determination of witness credibility. SeeJohnson
v. Merta, 95 Wis. 2d 141, 151-52, 289 N.W.2d 813 (1980).

¶12Second, the nondisclosure highlighted the inconsistency of what
RTF affirmatively represented on its website: that the units would maintain
specified standard operating temperatures with a “+/- 1ºC differential” and
would do so “under varying load conditions and ambient temperature
changes.”The trial court found that
those affirmative representations were untrue, deceptive or misleading because
the units could do neither of those tasks, and that, contrary to those positive
claims, Finck testified that RTF did not even attempt to manufacture the units
to meet those standards.In particular,
Finck’s emphasis on ambient temperature as an explanation for the units’
malfunction was directly at odds with the advertised claim that they would
maintain a steady temperature under ambient temperature changes.The affirmative statements captured
Agnesian’s interest; the nondisclosures pointed out their falsity.This is not a nondisclosure case.

¶13RTF also challenges the Wis.
Stat. § 100.18 claim on the basis that Agnesian failed to prove
that it relied on RTF’s representations and that, even if it did, the reliance
was unreasonable.We again disagree.

¶14Del Ponte testified that Agnesian relied on RTF’s website
representations.RTF contends that is
not proof of Agnesian’s reliance
because it was Del Ponte who identified RTF’s product as suitable but his supervisor
who placed the order. The supervisor did
not testify. RTF asserts: “Del Ponte’s
‘purchasing decision’ (a clever phrase) did not include placing the actual
order (the actual purchase decision),” and therefore “it is impossible
to tell what was relied upon and what ultimately became a part of the bargain.”
This is splitting hairs.Corporations of necessity act through their
employees or agents.Through its agents,
Agnesian searched for a product fitting its needs and relied on RTF’s
representations in purchasing the units.

¶15Agnesian, through Del Ponte, specifically contended it relied
on the website claim about the +/- 1°C differential.Del Ponte testified that he understood “+/-
1°C differential” to mean that the temperature would stay within 1°C of the set
point.RTF contends that if Agnesian
relied on the term for that meaning, it did so unreasonably.Finck testified that RTF did not manufacture
these units to maintain temperatures within one degree of their settings.Rather, he said, the term means the
temperature is adjustable in one-degree increments.

¶16Reasonable reliance is not an element of a Wis. Stat. § 100.18 cause of
action.Novell, 309 Wis. 2d 132,
¶53.The reasonableness of a person’s reliance
may be relevant, however, in determining whether there was a material
inducement.Id.RTF draws an analogy between the
reasonableness of Agnesian’s claimed reliance and that of a buyer of a Superman
cape advertised to enable flight. Seeid., ¶40. Noting that Del Ponte testified that he never
had seen a unit capable of the precise temperature control he claimed to
believe the RTF unit could achieve, RTF contends Agnesian could not possibly have
thought that an “off the shelf non-special order” would prevent temperature fluctuation
by more than one degree up or down.

¶17Agnesian’s understanding does not seem far-fetched to us.Besides Del Ponte, its refrigeration expert
testified that the website’s claim that the units were “equipped to … maintain
standard operating temperatures of +4°C in the Refrigerator section … with [a]
+/- 1°C differential[]”means that “if
you set that at 4 degrees C that temperature should not exceed 5 degrees C nor
should it drop below 3 degrees C.”The
trial court read it the same way.This
is a far cry from the fantastical Superman-cape example where the court said it
would be “hard pressed to say … that a trial is required if an adult of normal intelligence
who buys the cloak would have a claim under Wis.
Stat. § 100.18 if the cloak did not let the buyer fly.”Id. (citation omitted).An adult of normal intelligence should be
able to reasonably rely that the claims mean what Agnesian understood them to
mean.

¶18Having concluded that the evidence was sufficient to support a
finding that RTF violated Wis. Stat. § 100.18,
we also approve the trial court’s award of attorney fees under that statute and
remand the matter for a determination of appellate attorney fees.See
§ 100.18(11)(b)2. (“Any person suffering pecuniary loss because of a
violation of this section by any other person … shall recover … reasonable
attorney fees”). Accordingly, we need
not address either RTF’s further arguments that the evidence is insufficient to
support Agnesian’s breach of express and implied warranty claims, or the
propriety of attorney fees under Wis.
Stat. § 804.12(2) or the court’s inherent authority.

By the Court.—Judgment affirmed and
cause remanded.

This
opinion will not be published.SeeWis.
Stat. Rule 809.23(1)(b)5.

[1] All
references to the Wisconsin Statutes are to the 2009-10 version unless noted.